People are forgetting that the reason we're having all the forclosures is due to too many people getting loans they should not have recieved thanks to the CRA.
We had rising housing prices AND increases in the number of homeowners for the past 2 decades. When you increase it above the natural limit through artificial means, there will be problems. The govenrments and the big banks are at fault for this, as well as the stupid people that bought the houses.
I have to say this:
- It's the governments fault for promising big banks money in case people defaulted, thereby okaying predatory lending, thanks to the Community Reinvestment Act of 1995 and 1999.
- It's the banks faults for preying on people, and knowing the assets they held were toxic
- It's the people's faults for buying houses that were too big, too costly, and beyond what they could afford.
In the end, it's everyone's fault. Not just government, because people bought the houses. It's not just banks, because the government incentivized predatory lending. It's not just the people, because these problems didn't exist till government and banks decided to prey on a higher-than-natural home ownership rate.
The fact is, the governments and banks tried to subsidize stupidity. Not everyone can own a home, but they tried to allow it and it's backfired, giving way to a lot of other problems that we're now seeing in the recession.
In the end, I think that the people that bought into it are the most at fault. No one put a gun to my parents heads' and told them to buy a house they couldn't afford. Foreclosures should happen because you can't bankroll bad economic practices, which the government is doing.
Back from the dead, I'm afraid.
